With UAW strike likely, is now a good time to buy a car?

With the deadline for the United Auto Workers new contract quickly approaching, consumers who need a new vehicle are wondering: Is now a good time to buy a car? 

The answer isn’t exactly straightforward, since it depends on many factors, including your timeline, the brands you’re considering, and whether you’re in the market for a new or used car.

Read on for answers to pressing questions you may have about buying a new car ahead of a potential UAW strike.

The UAW is negotiating contracts right now with Detroit automakers Ford, General Motors, and Stellantis — known as the “Big Three.” If an agreement isn’t reached by 11:59 p.m. on Thursday, September 14, then UAW will strike. 

It would be the first UAW strike against all three manufacturers at the same time. (The last UAW strike, which was against GM in 2019, lasted 40 days.) Some of the car brands those companies make include Jeep, Dodge, Chevrolet, Lincoln, Buick, the popular Ford F-series, and many more. 

While some models are manufactured in Mexico or Canada, the supply chain throughout North America is deeply intertwined. That means even though Mexican and Canadian workers aren’t striking, they often rely on parts manufactured in the U.S.

The strike wouldn’t affect cars manufactured by anyone other than Ford, GM, or Stellantis. That means fans of Toyota, Honda, Subaru, and others would continue to have options — to a point. The one complication? If the strike goes on long enough, demand might increase for these brands, which could create delays similar to those experienced during the pandemic.

After spiking during the pandemic, car prices have begun falling in recent months. A strike would likely reverse that trend. As inventory falls, prices on both new and used cars could increase by about 2% in as little as two weeks, according to J.D. Power and Associates. (The average price of a new car in July was $48,344, according to Kelley Blue Book.)

While MSRPs might not move for a couple of weeks, there could be one immediate financial impact for consumers: Dealers would likely stop offering incentives very soon after the strike begins. So while the list price might remain stable, consumers would still pay more than they would when dealers want to sweeten the package.

The short answer is yes. But exactly how much that matters depends on whether you’re considering a car from one of the manufacturers involved in the strike, and if so, how picky you are about details like trim and color. 

The U.S. has an inventory of 2 million unsold new cars right now, the most in nearly two-and-a-half years, according to an analysis by Cox Automotive. That breaks down to about two months worth of inventory for the average dealer at the rate people are buying cars right now. Used car inventory is hovering around 2.2 million, according to Cox, which comes out to about 47 days worth of sales for the average dealer.

Companies that aren’t involved with the strike will continue shipping new cars to dealers, though with fewer options overall, there might come a point where you have to wait a little while to drive a new car home. If you’re flexible about the details, you’ll likely be able to shop the existing inventory from Ford, GM, and Stellantis for a while — especially because these big manufacturers typically have more backstock than other smaller brands. (Collectively, they typically roll out about 150,000 new cars a week.)

There’s no need to stampede to the car dealership. Prices could increase slightly in the coming weeks and there may be shortages of specific models in the next few months — but none of it will feel too different from how supply disruptions affected inventory during the pandemic. 

If you need a car soon and have your heart set on a specific model manufactured by one of the Big Three, you may want to consider buying sooner rather than later. But if you’re open to different options from those companies and especially if you’re willing to consider brands from other manufacturers, you have some time to make a thoughtful decision. 

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].